UNITED STATES - CONTRACTS - EFFECT, WHEN TAX IS DECLARED UNCONSTITUTIONAL, OF PROVISIONS FOR INCREASE OR DECREASE OF PURCHASE PRICE FOR TAXES "IMPOSED" OR "CHANGED"

Authors

Wilbur Jacobs, University of Michigan Law SchoolFollow

Abstract

Between May 1935 and January 1936 the federal government purchased flour from respondent through contracts which contained a so-called "up and down" tax clause. The basic price charged included the A.A.A. processing taxes. During this same period respondent obtained an injunction against the collection of said processing taxes and, as a result of the decision of the Supreme Court in United States v. Butler, was relieved of liability for the tax. In a later suit brought by respondent in the Court of Claims to recover on other contracts, the government claimed a setoff for the amount of these taxes. Judgment having been entered for respondent, the government appealed. Held, reversed, since the passage of the "windfall" tax by Congress constituted a "change" in existing processing taxes within the contract provision. United States v. Kansas Flour Mills Corp., (U.S. 1941) 62 S. Ct. 232.

Recommended Citation

Wilbur Jacobs, UNITED STATES - CONTRACTS - EFFECT, WHEN TAX IS DECLARED UNCONSTITUTIONAL, OF PROVISIONS FOR INCREASE OR DECREASE OF PURCHASE PRICE FOR TAXES "IMPOSED" OR "CHANGED", 40 Mich. L. Rev. 767 (1942).
Available at: https://repository.law.umich.edu/mlr/vol40/iss5/19